Firm, CalPERS agree to stop using placement agents

SACRAMENTO, Calif. 
California's largest pension fund has reached an agreement with one of its key asset-management firms to stop its use of placement agents to secure investments.

The California Public Employees Retirement System said Monday it will reduce the fees it pays to Apollo Global Management by $125 million over the next five years.

The agreement was brokered by Steptoe and Johnson, a law firm hired by CalPERS to review its interactions with placement agents over the past 15 years. Placement agents are the go-betweens who help firms win lucrative contracts to invest pension money.

CalPERS launched the investigation when it found its top 10 placement agents were paid $125 million during that time. Nearly half those fees were paid to Alfred Villalobos, a former CalPERS board member.